Monday, April 20, 2009

Ditch That

by D. Babbs

NEW YORK (CNNMoney.com) -- Many college graduates are struggling with heavy student loan debt and steep monthly payments that limit their professional options. But for some, choosing the career of their dreams could actually lift that burden.

Two-thirds of college graduates leave school nearly $20,000 in debt, according to the National Postsecondary Student Aid study. With mounting job losses and unemployment at a 25-year high, those considering changing careers and pursuing passions must weigh the risk of a pay cut.

But now some students can reduce - or even wipe out their debt - just by following their calling. More liberal loan forgiveness programs are adding a financial incentive to working in traditionally low-paying fields.

Under certain circumstances, the federal government will reduce payments, and ultimately forgive all or part of an educational loan for those who choose a career in the military, volunteering, teaching or practicing law or medicine in low-income communities. And some may even be able to reduce their payments, based solely on their income and family size.